Saturday, April 28, 2007

Investment banks do a lot of research work. Hence analysts are required by many divisions, such as Equities, FI, AM, ECM, IB, FX etc. Among all, Equities has the most need for analysts. Let’s look at my most admired bulge bracket Goldman Sachs. We’ll try to understand how their equities department is structured, what kind of entry level jobs is available and what kind of candidates they look for.

Quotes from Goldman Sachs:To work as a member of the Goldman Sachs Equities division, a degree in economics or finance is not essential – energy, enthusiasm, creativity and a commitment to teamwork are. Read more.As a member of the Equities team, you need to have a certain comfort with numbers, but you do not need to be a finance expert. We can train you to do the necessary calculations. Read more.

Fiona from Deutsche Bank, New YorkFiona joined Deutsche Bank through U Penn's recruiting services. She’s an analyst at the Asset Management Division in New York. Let’s see her work, her background and how she became an analyst.

Ronald from Morgan Stanley, New YorkRonald is an analyst at the investment banking division. He started as a summer intern and subsequently being hired in 2003. Let’s see how Ronald describes his work and Morgan Stanley’s mentorship program.

Jennifer from UBS, LondonJennifer had a summer internship with Equity Research in 2002 and was subsequently hired in 2004. Here’s what she says about her daily work.

What I do today: I am a member of the Asset Allocation team within Economic Research. We maintain a model investment portfolio of different equity and fixed income asset classes. My job involves writing research contributions on the most appropriate weighting of various assets. A weekly research publication for portfolio managers aggregates our current views and recommendations. Other responsibilities include making charts and dealing with data requests. It’s not all number crunching though: I also talk to our analysts to get their views. I’m fortunate to be surrounded by highly intelligent and informed people. We hold challenging discussions every day. I also get to do something I find interesting and apply my degree.Source: UBS

ConclusionIn my experience, many candidates’ first full time job was actually where you had their internship. Make sure you look for an appropriate opportunity that suits your interest and capability, even it is an internship job.

Answer to My Previous QuestionWhich of the following is NOT a component of the Dow Jones Industrial?A: McDonald’sB: Walt DisneyC: Pepsi ColaD: Procter & Gamble

Thursday, April 26, 2007

There are well-paid, well-respected research positions available in investment banking. Therefore a great place to begin your investment banking career is working as an analyst. Successful analysts work hard, understand spreadsheets, and have fine analytical skills. Analysts can be promoted to associates who do similar work, but more of it.

As an entry level analyst in investment banking, you will often write reports, do research, and handle trades, run spreadsheets, and code programs. You need to be fast, accurate and complete. Mundane research tasks would include digging up information and editing/formatting reports. Some graduates find this job boring and give up in the first year. Those who survive and gain experience will have the chance to work with clients.

Required Skill SetsNewly-hired analysts are often recent graduates with degrees in accounting, finance, or economics. Analysts need to understand and be able to interpret accounting data. In the long run, you would need to be a CFA for further advance in your investment banking career.* Quantitative and analytical skills* Marketing and communication skills* Motivation and tenacity* Decision making and problem solving skills* Interpersonal skills

Is Investment Banking an Easy Boat to Catch?No. It is difficult to start. Entry level employees should expect long but stimulating work days in which the mood can regularly shift depending on the situation. You would expect to work about 80 hours a week, often including weekends.

What Money to Make?In 2006, MBA graduates with less than one year’s experience make around $230,000 p.a. (salary + bonus)Career AdvancementAnalyst positions are typically designed as 2-3 year positions. Most analysts then either leave the field or go on to graduate school; many enter MBA programs. Some are hired by private equity firms, who value their analytical training and experience. Some are promoted from within to Associate.

One of my outstanding candidates who is now the head of equities of a European investment bank, started as a generalist analyst. He quickly moved on to be a sector analyst in a year’s time and follow up on several specific industries. In four years, he made himself a head of equities research leading a team of six analysts. Depending on your performance, the position and money you earn are going to skyrocket.

Test of Your Investment KnowledgeWhich of the following is NOT a component of the Dow Jones Industrial?A: McDonald’sB: Walt DisneyC: Pepsi ColaD: Procter & Gamble

Friday, April 20, 2007

Do You Possess the Qualifications Needed for an Investment Banking Career?

Ellen Miller, managing director and head of European graduate recruitment and development at Lehman Brothers in London, told Financial Times (September 11, 2006) that the demand for MSc graduates in banking has rocketed over the past two years and there is a growing interest in students for long internships.In my experience, candidates with a master’s degree are licensed to success. Investment banks want the best out of the best. Therefore, if your MSc or MBA is from HEC or MIT, you have a competitive advantage. However, man is not created equal. Not everyone has a chance to get educated from famous institutes. If you are dedicated to an investment banking career, make yourself a CFA. If you have an MSc and a CFA, you are going to blow away a lot of competitions. Try to complete all the exams within the first five years after graduation. It’s going to be a lot of hard work, but it will certainly accelerate your promotion speed. The twin star qualifications mostly wanted by investment banks are MBA/MSc + CFA. As a matter of fact, a high percentage of my clients/candidates who are now department heads or regional heads or even global heads in the bulge brackets, do have a similar educational background.

On the contrary, I must emphasis that qualifications are only the keys to open the door to the world of investment banking. Your future depends on how well you do in your job. Remember performance bonus contributes a great majority of your total income package.

What if I don’t have a finance-related degree nor I am not a CFA, can I be an investment banker? Yes. Industry specialists are wanted by investment banks. If you do well in a certain industry, you can start your banking career as an equity analyst. One of my clients, the former Asia head of equities at a US bulge bracket, didn’t have a degree related to finance or banking. He started his career as a police fighting against commercial crimes. There are other qualifications needed if you want to pursue an investment banking career. Go sit for some NASD Exams (series 6 or 7), if you want to become a trader. Click the above link to see more information on CFA and NASD Exams. Test of Your Investment KnowledgeQuestion: What is scripophily?

A: A substitute for currency that is not legal tenderB: The study and collection of antique stocks, bonds and other securitiesC: A legal document stating the price of a newly issued securityD: A graph of all possible combinations of inputs that result in a given level of outputClick here for an answerIs investment banking your dream job? Take a FREE career test!Investment Banking Career

Many investment bankers retire at their 30’s. Consider the firm they work for, the title they hold and the money they make, everyone will admire them. Why these bankers choose to go skiing, visit penguins at the South Pole or even return to school?

There are two major reasons. They just can’t put up with their stressful investment banking jobs any more. They’ve made enough money to maintain their desired living standard for the rest of their life. A lot of them return to work after a two-year sabbatical, only because they are workaholics.According to WikiHow, investment banking is the number one suggestion for those who want to retire in their 30’s.

If you are already in your mid or late 20’s, it might be a little late to talk about retirement in your 30’s. You have to start planning while you are still at college.

Do you really fit an investment banking career?I’ve mentioned at the beginning of this blog, to step into the door of any bulge brackets at the Wall Street, you need to start with a good work history in order to build an impressive resume.

Many of my outstanding candidates’ first jobs were actually where they had their internships. Therefore you need to plan your investment banking career when you are an undergraduate. Aim for an internship at a reputable bank. Make it a goal for your resume to be on the radar screens of every Wall Street recruiting director by December holidays.

What is the best way to get to know how an investment banking career is like? The best is to do informational interviews.

What exactly is an informational interview?An informational interview is a highly focused information gathering session with a networking contact designed to help you choose or refine your career path by giving you the “insider" point of view.

Career Fairs– meet bank representatives and prepare a set of questions to ask.

Talk to Alumni - Alumni investment bankers are among the best connections you can make – meet them, learn from them what’s happening in the firms (deals in the works, deals that they’ve worked on, trends). If they offer to take your resume to circulate among their co-workers, take them up on it. Ask if there are others within the alum’s firm that they could recommend to you for contacting.

Go to New York, or to wherever you want to be located, and introduce yourself to alumni that work in investment banks in that location. Email or phone calls may work, but face-to-face is the best. Ask for their observations, perspectives and advice on how to get connected with other industry players.

If you are dedicated to an investment banking career, you need to know New York, London, Tokyo and Hong Kong. I will cover investment banking travel in my future posts.

Tip - In any information interview, focus on information collection ONLY. Don’t ask to have your resume circulated unless the interviewer offers to. How to set up an informational interview?

An information interview can be obtained through personal referral, written request, or cold-call telephone contact. An email followed by a phone call would be most effective. Questions to ask at an informational interview· Work Environment· Ideal Skill Set/Qualifications· Industry Trends· Career Path of Interviewee· Lifestyle· Typical Compensation· Challenges/Rewards· Career Ladder of Field

About Me

A Note from Anna Maria D'Souza

Due to my full time commitments, I am unable to provide free resume review any more.

If you have less than three years full-time work experience, and would like to seek my personal help, email me at ibankingresumes(at)yahoo(dot)com. I will give you a quotation. I respect your privacy and will not sell your email address to third party.

You can also check out the Career Tools I listed at top of this sidebar for immediate assistance.